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That Dirty Little Four Letter Word.....DEBT

2762 Views 5 Replies 5 Participants Last post by  Canadian
No matter how we want to dance around it, the number one problem facing many, if not most of us, is debt. For too long, we have been robbing Peter to pay Paul and now we're having to pay the piper for our undisciplined spending. When you spend more than you make, the question is not whether it will come back to bite you, but when.

It's true that extraordinary circumstances beyond our control can lead us into debt, but usually it's because we just don't get the simple concept of no money-no buy We are so accustomed to having our wants and needs instantly gratified like five-minute mashed potatoes, that rather than saving for something, we use a piece of plastic and simply charge it . Then off we go back home feeling like a rich man and ignoring the little twinge of guilt and self-loathing that keeps whispering in our ear, I shouldn't have bought that I can't afford it . Back at home, we seal our fate by consoling ourselves with how well it works, or looks, or feels, or fits, and the fail-proof excuse that it was ON SALE

How can we honestly work for the cause when we are helping to maintain the lucrative business of bankers and other credit peddlers? How can we become unencumbered by the system when everything we own belongs to someone else via the loan, mortage, or credit financing we signed up for to obtain them? We have virtually sold ourselves into slavery.

The rich rules over the poor, And the borrower becomes the lender's slave. (Pro. 22:7)

How many of us are being held hostage to a state of unpreparedness because we don't have the money to invest in long-term supplies and essential items necessary for survival? Do not doubt that it is the grace of God that has prevented a catastrophe from happening already and catching us woefully lacking in the means to feed and care for our families.

If we consider the conspiratorial thought that Americans have intentionally been led into high debt, so that they will, in the long run, lose their properties through foreclosure, we are no better off than the sheeple who also fell into the trap with us. If the market collapsed tomorrow, where would most of us be?

We will always be pursuing liberty so long as we are in financial chains. Our ongoing priority must be to work towards debt-free living. I cannot offer advice that wouldn't be someone else's hard thought out plan. That someone would be Dave Ramsey, today's leading Christian financial guru. His common sense approach to getting out of debt and living debt-free is making him a household name. His website contains a link to streaming audio of his daily three hour talk show. If you're in debt, you need to listen to him. Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan.

The American people have been deceived. The entire credit/banking system is designed to make you a slave, to keep you in continual debt to your master and to track and control your every move. Today the American Patriot faces an uphill battle. Many people are deep in debt, barely able to make ends meet. They are living paycheck to paycheck with no savings. Thanks to NAFTA and GATT they live in constant fear of losing their job due to corporate downsizing or outsourcing. Yet some deluded Amerikans will proudly proclaim; "But, I'm in good shape. I own a new house, SUV, bass boat and a big screen TV and I only have 20 more years left on the mortgage". Actually they own nothing. If they loose that cushy job, they will find out in a hurry who actually owns it ALL...the Bank. They are nothing but low wage, debt slaves.

Put away the fear, take the bull by the horns and wrestle it to the ground.

You must realign your thinking. Put away the materialism of the modern world. Forget instant gratification. Stop being a greedy child that has to have everything it see's. Divorce yourself from the banking/credit scam system that tracks your every move and reports you to Big Brother.

You have to have a well thought out plan. Remember if you fail to have planned to fail.

Step 1 Financial Plan:

First, begin by preparing a Financial Statement. A financial statement is nothing more than listing all your sources of incoming money (your job, your spouse's job, investments, alimony, interest on accounts, etc.) and a list of your debts. The objective to a Financial Statement is to determine where you are financially and exactly where you can go based upon your current situation. You may have fretted over buying that Main Battle Rifle when the money was right under your nose all the time.

Get a 3 ring binder and some note book paper. Take the first sheet of paper; write FINANCIAL STATEMENT at the top of this page and divide it into 2 columns. In the first column labeled ASSETS, you will list all your assets and sources of income house, car, boat, savings account, checking account, furniture, computer, firearms, etc. If it has a monetary value if liquidated, list it and what it would actually be worth.

In the second column list all your debts or LIABILITIES. These include, but are not limited to your mortgage payment, car payment, insurance, taxes, credit card debts, loans, child support, and anything else you have to write checks for (except for food, clothing, entertainment, etc.)

Step 2 Budget:
Second, write up a monthly budget. Spend a month keeping track of every single penny you spend so you will know exactly where all the money goes. Then, make a bare bones budget and stick to it. Cut out all non-essential expenses. Pay the essentials first. They are Food, water, utilities and rent or mortgage.

List ALL your obligations and the amounts for the MONTH. Spend every dollar on paper BEFORE you do it for real. Make up several envelopes labeled RENT, CAR, GAS, POWER, WATER, FOOD, Credit #1, Credit #2, ECT... and put the money, IN CASH, into these envelopes. Use only what's in the envelope and use it only for what it's labeled for. Eat out of your refrigerator and lay off the fast food. You can buy a loaf of bread, package of cheese, pack of lunch meat, sodas, and tater chips for a week of lunches with the same amount you spend on 3 meals at the drive thru.

At the end of the month, any excess can be applied to your preps. If there is more money in say your water bill envelope, than the actual bill was for, use it on the debt snowball .

STEP 3 Emergency Fund
It is a fact that Murphy will come to visit you when least expected and when you can least afford it. Create your own insurance policy. Now that you are on a tight budget, save up a minimum $1000 emergency fund. Pay minimum on all debts until you get this in the bank. If your job won't allow this, get another one or at least a second part time job. The extra hours you invest NOW will save you hundreds or thousands of dollars in interest as you pay off those debts early. Have a yard sale. Sell off all unnecessary items and junk for extra cash.

Step 4 - Credit Cards are the #1 debt of Americans. Stop using credit cards for anything. PAY CASH. Cut up the credit cards and get rid of them so you won't give in to temptation. If you are afraid of MURPHY, get a DEBIT CARD and keep your emergency fund in your checking account.

Get out of your dead end debts. Forego that big car note and get yourself a $1500 reliable used clunker for now. Remember, a car IS NOT an investment. They only depreciate in value.

Step 5 - Pay off your debts ASAP using the snowball . This means you list your debts [EXCEPT THE HOUSE] by AMOUNT OWED and pay minimum on all but the LOWEST. ATTACK the smallest with a vengeance. Pay as much as you can afford to pay on this one until it is paid off. Then as you move to the next smallest, roll the amount you were paying on the aforementioned bill into the payment to this one. Move upward through your debts in this fashion ATTACKING each one until it's blasted away. (note - this is why you cut up your credit cards. you can't keep running the bill up if you don't use them)

Have a yard/garage sale and sell off all the junk you don't use and don't need. Use that money to pay for miscellaneous survival preps.

Step 6 - Build a nest egg of hard currency. When you have gotten your debts paid off, increase your emergency fund. Go for a whole month's worth of your obligations/bills amount and graduate up to six months worth. This helps out a lot when those unemployment or MURPHY situations come up. You should maintain at least a 3 month, preferably 6 month emergency cash reserve to cover ALL living expenses.

Step 7 - Build your preps to a ONE YEAR supply of everything you need. You have X amount of income freed up so it won't take long at all. (I will go into what these preps consist of in a future post)

Step 8 - If you have a house, this is where you attack the house note. You have plenty of income to do this now. Get a breakdown of the INTEREST vs PRINCIPLE and pay your regular note PLUS the principle for the next note. Make sure your extra payment is put towards the principle. This is where you save the THOUSANDS of $$$ I mentioned earlier.

If you do not get caught up in credit cards again, or some type of auto fleece (lease), this is also the point at which you can easily buy your larger/more expensive gear and survival supplies.

DO NOT get depressed and fall off the wagon . This plan takes time. Maybe even a couple of years depending on your debt. It's up to you. Live in Financial peace and freedom, OR, as a slave to the debtor. Your mindset will have EVERYTHING to do with whether you are successful in this.
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I didn't realize that I was following the plan my whole life. I hate debt. I always have. I have a credit-card with a huge limit on it (I can buy a brand-new car on it without blinking), and I keep it at a zero-balance. What I spend on it in a month, I pay off ASAP (usually by the end of the next month) - depending on the type of bill that was put onto it.

I have purchased my vehicles by loan - most of the vehicles (used) have been paid off in 1 year with very low payments and low interest rates. My current vehicle is on a "long payment plan" - but - it was brand-new. I have no plans on selling it. I have a 20 year old Jeep that has just moved from being my primary vehicle to being secondary - I can keep my new one for at least that long :D

I am at my 10th year of paying my house, and, when I sell it off I will have money left over in the bank to go as down-payment on my dream house - off-the-grid. My house is only 850 sq-ft - I don't need a big place to be happy - just a roof and a bed, and a place to store my tools and gear.

I will be throwing away or giving away or selling off alot of stuff in the new year - it is a normal thing that happens. I go through everything - if it hasn't moved or been touched in a year, and has no value to me (sentimental is different) - its gone.
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My house is paid off. My car is about seven years old but works fine and is also paid off. I have one credit card that I use for business only and I pay it off before the end of the month. I have no loans or debts of any kind. Up until my late 20's I paid cash for everything. I only got a credit card because I went to get a brand new car and they declined me because I had no credit history. I got the card and used it for a month. Went back and got the car and then cancelled the card. I only got my second card a few years ago.

From a Canadian perspective the bailout was a "must do" for the United States government. The reason why is that they want to avoid what is internationally referred to as the "Road Warrior" scenario. Americans have more guns in civilian hands than any other nation on earth. The last thing they want is unemployed homeless Americans with guns roaming around the country.

If they do the bailout people get to keep their homes and their awful debts. Even if things get really bad they will barricade themselves in their homes and stay put. The American government is more afraid of it's people than ever before.

There's an old saying. Something like "A man isn't free unless he has nothing left to lose." As long as Americans have homes and debts they will stay put. Once they have nothing left to lose you lay the path to another revolution.
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this is a good set of 5 videos explaining how debt has become a way of life

I got into debt by having a heart attack in 2002. My share was 2-1/2 years salary, which I'm still paying on. Once you get there, it' ain't that easy getting out.
I'm glad my country has free health care for everyone.
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